Senate Republicans are setting up a major gamble to renew President Donald Trump’s signature tax cuts later this year. In rolling out their new budget blueprint on Wednesday, GOP senators opted to punt on some of the most pressing questions about how their framework can survive Senate procedure. As it stands, the Republican ploy can end only one of two ways: embarrassing failure or the congressional equivalent of a high-stakes heist, breaking the law to dole out trillions of dollars in tax cuts to the wealthy.
House and Senate Republicans have been at odds for months now about how to answer Trump’s request to combine his entire agenda into one “big, beautiful bill.” After House Speaker Mike Johnson, R-La., managed to squeak through a framework that combined tax cuts with Trump’s other priorities, it fell to the Senate to follow suit.
The Republican ploy can end only one of two ways: embarrassing failure or the congressional equivalent of a high-stakes heist
In hopes of avoiding a Democratic filibuster, the GOP’s plan has been to use a process known as “budget reconciliation.” The upside is that doing so would let the final bill pass with a simple majority. The downside is that the reconciliation process comes with a lot of rules and provisos that need to be met under the Congressional Budget Act.
Of all those rules and provisos, there are three big ones that you need to know: The final reconciliation bill must focus only on changes to taxes and spending, things that are only “merely incidental” to spending or revenues can be stripped out and require 60 votes to be put back in and, crucially, the changes can’t increase deficits or reduce surpluses beyond a 10-year budget window.
That last requirement has given the GOP a major headache as it has tried to make the tax cuts from Trump’s first-term permanent. Doing so would absolutely count as increasing the deficit far beyond the 10-year window allowed under the current rules. Just extending the current rates that are set to expire would cost $4 trillion in that 10-year window, according to the Congressional Budget Office’s estimate, far more than even the massive spending cuts Republicans can agree on.
The budget framework that Senate Budget Committee Chair Lindsey Graham, R-S.C., debuted on Wednesday provides room for the Finance Committee to add no more than $1.5 trillion to the deficit through 2034. That isn’t enough room to extend the Trump tax cuts, which were heavily tilted to the ultra-wealthy and corporations. But Republicans’ solution is to simply pretend that extending those tax cuts doesn’t cost anything.
The only way this gambit works is by ignoring the fact that rates would increase again without congressional action. Instead, Republicans would try to count the cuts against a “current policy baseline” that effectively would set the cost of renewal at $0. It’s a formula that’s never been tested — and if the Senate GOP had its way, it never would need to be.
Everything that goes into a reconciliation bill must eventually go through the Senate parliamentarian, Elizabeth MacDonough, to ensure it follows the Budget Control Act’s rules. It’s arguably the most important job on Capitol Hill that almost no one knows exists. Rather than defend the baseline in front of MacDonough, as is typically done, Republicans decided to release their framework before getting a ruling.
The time bomb that Graham and Thune have left in the framework could blow up the entire process at almost any point
This is where things get risky for Senate Majority Leader John Thune, R-S.D., who has decided that it’s more important to pass a compromise framework with the House sooner rather than later. If Congress becomes locked into using this framework, then there’s no wiggle room for the Senate Finance Committee or the House Ways and Means Committee to change it. Should the parliamentarian later decide that there’s no way that these shenanigans pass muster, the whole process will need to start over again, or Republicans will have to let some of the tax cuts expire after all.
The most obvious way out for Republicans is to overrule the parliamentarian, which requires only a simple majority. But Thune previously said that he wouldn’t want to have his caucus overrule the parliamentarian on the floor, as doing so would be the first step to eliminating the filibuster entirely. The GOP caucus could try to replace MacDonough as parliamentarian with someone more pliable, as it did in 2001. But given her popularity among senators on both sides of the aisle, it seems unlikely the GOP will find a majority in support.
Now the Senate is barreling ahead on this bit of legislative prestidigitation, with Republicans aiming for a vote later this week. Should it pass, it would then need to go back to the House for its approval before the two chambers’ committees could finally get to work filling in the details. Even as that work is conducted, the time bomb that Graham and Thune have left in the framework could blow up the entire process at almost any point, right up until it’s time for the final package to hit the Senate floor. The only questions then will be how much of Trump’s agenda gets caught in the blast and how the GOP handles the fallout.